Leasehold enfranchisement – Leasehold reform Act 1967 – Acquisition of freehold – Purchase price – Appellant seeking to acquire freehold of property pursuant to 1967 Act – Appellant’s existing lease extended under 1967 Act before March 1986 – Whether freehold to be valued on assumption that subject to lease as extended or original lease term – Effect of section 9(1AA)(a) of 1967 Act and section 23(1) of Housing and Planning Act 1986 – Section 17 of Interpretation Act 1978 – Appeal allowed
The first-tier tribunal (FTT) was asked to determine the price payable by the appellant, as the long lessee of a property in Maida Vale, London W9, to acquire the freehold of that property from the respondent landlord by enfranchisement under the Leasehold Reform Act 1967. The lease was originally for a term expiring in 2016 but in 1983 it had been extended for a further 50 years, on an application by the appellant’s predecessor in title under section 14 of the 1967 Act, so as to expire in 2066. The relevant valuation date was October 2013.
The respondent argued that the freehold should be valued on the assumption that it was subject to a lease expiring on the original term date in 2016. It contended that that result flowed from an application of section 9(1AA)(a) of the 1967 Act, as amended by section 143 of the Commonhold and Leasehold Reform Act 2002, so far as it required the assumption, in cases where the tenancy had been extended under the 1967 Act, that the tenancy would terminate on the original term date. That provision replicated the effect of an earlier amendment, introduced by section 23(1) of the Housing and Planning Act 1986, to the wording then contained in section 9(1A)(a) of the 1967 Act. However, by section 23(3) of the 1986 Act, the earlier amendment had no application to cases where, as with the appellant’s lease, the section 14 notice to extend the lease had been given before 5 March 1986.
The appellant contended that the freehold should be valued subject to the actual lease term as extended until 2066. It submitted that, although the amendments made by section 23(1) of the 1986 Act had been repealed by the 2002 Act, section 23(3) continued to apply to the similar wording introduced by that Act, which constituted a “re-enactment” of the relevant provisions within the meaning of section 17 of the Interpretation Act 1978.
The FTT found in favour of the respondent on that issue and calculated the purchase price for the freehold at a little over £2.888m, on the assumption that the existing lease would expire in 2016. The appellant appealed. The parties agreed that the purchase price, calculated on the appellant’s preferred basis, was £1.748m.
Held: The appeal was dismissed.
The wording introduced into section 9(1A) of the 1967 Act by section 23(1) of the 1986 Act was an enactment which had been repealed by section 180 of the 2002 Act and Schedule 14 thereto, and the commencement order made thereunder. The subsequent enactment made in section 9(1AA)(a) was a re-enactment of the relevant wording, with grammatical modifications. Section 9(1AA) therefore contained a re-enactment, with modification, of the previous enactment, to which, by section 17(2) of the Interpretation Act 1978, any reference in any other enactment would continue to apply.
Although the effect of section 17(2) would be displaced where a “contrary intention” appeared, the relevant legislation did not demonstrate any such contrary intention. If a contrary intention was to be expressed, it should be found in the repealing Act itself, rather than in some statutory instrument made under the 2002 Act: Director of Public Prosecutions v Inegbu [2008] EWHC 3242 (Admin); [2009] 1 WLR 2327 applied. The repeals made by section 180 of, and Schedule 14 to, the 2002 Act had included a provision of the 1986 Act which was not relevant for present purposes, in addition to the relevant words in section 9(1A) of the 1967 Act. The draftsman had therefore considered what provisions of the 1986 Act needed to be repealed, but had not included any part of section 23. Accordingly, while some of the words inserted into section 9(1A) of the 1967 Act had been repealed out of that provision, the whole of section 23 of the 1986 Act remained unamended on the statute book. The fact that the 2002 Act made some repeal to the 1986 Act but did not in any way amend section 23 showed an intention consistent with, rather than contrary to, the operation of section 17(2) of the Interpretation Act 1978.
The commencement order made under the 2002 Act did not show an intention to exclude the continued operation of section 23(3) of the 1986 Act, partly because it was a transitional provision in a statutory instrument and its wording was not in the 2002 Act itself, and partly because that wording was not in any event exhaustive regarding the commencement provisions.
Accordingly, by operation of section 17(2) of the Interpretation Act 1978, the provisions of section 23(3) of the 1986 Act applied to the provisions of section 9(1AA)(a) of the Leasehold Reform Act 1967 as amended. It followed that, since notice under section 14 of the 1967 Act to extend the appellant’s lease had been given before 5 March 1986, the valuation assumption to be made did not include the assumption that the tenancy would terminate on the original term date in 2016. Instead, it was to be assumed that the tenancy would expire on its actual expiry date in 2066. The purchase price was therefore £1.748m.
Philip Rainey QC (instructed by Forsters LLP) appeared for the appellant; Mark Loveday (instructed by Pemberton Greenish LLP) appeared for the respondent.
Sally Dobson, barrister
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